Scaling American Foundries
A Policy Framework for Domestic Forgings and Castings
Summary
The American industrial base is at a critical juncture. Years of offshoring advanced manufacturing processes have created single-source dependencies for large-scale components essential to shipbuilding, nuclear power, and renewable energy, while smaller parts suffer from aging facilities and slow production. Lead times for critical cast and forge components now average 12 months, with some stretching to 48 months. These inefficiencies ripple through the supply chain, leaving manufacturers waiting for key components.
With the recent policy changes toward wartime-level defense production and grid modernization to maintain American AI dominance, the DOW, DOE, and DOC should coordinate to rebuild domestic casting and forging capacity. A joint effort strengthening the dual-use demand signal, de-risking capital investment, and modernizing the labor force will revitalize this sector that drives defense and energy production. American industry has done this before, and it can do it again.
Challenge and Opportunity
The U.S. has minimal foundry capability for large-scale forgings and castings of high-performance alloys. From 1980 to 2000, the number of foundries has dropped by 40%, with one projection showing suppliers down by 80%. For the large, high performance alloy parts in shipbuilding and nuclear power facilities, the United States faces a domestic single-source risk, with only one facility capable of producing several key components. Part of this challenge is due to the offshoring of these facilities and endemic skilled labor shortages. Without taking deliberate action, the American industrial base could face more significant single-source risks.
However, recent policy momentum to reorient the DOW’s acquisition priorities presents the opportunity to counteract these challenges. Addressing this bottleneck would unlock rapid scaling of energy production facilities needed to fuel AI data centers and quantum computing infrastructure. By taking swift policy action, domestic industrial infrastructure foundries can be integrated to fuel economic and strategic dominance for years to come.
Plan of Action
A joint foundry task force should be organized under the newly established Wartime Production Unit, including officials from DOW, DOE, DOL, and DOC. These agencies can align their policy priorities to implement targeted initiatives for rebuilding the foundry industry.
This task force should address three key priorities: 1. Workforce Modernization, 2. De-risking Capital Expenditures, and 3. Sending a Consistent, Dual-use Demand signal. These policy levers reflect the broad consensus in the policy literature and would reduce investment risk in the foundry industry, incentivize private industry to operate these foundries within the United States, and alleviate offshore and single-source risk while scaling production for downstream industries.
Workforce Modernization: The DOL could take on efforts to incentivize labor force training in the advanced manufacturing space to staff the reinvigorated foundry industry. This could look like updating existing workforce training programs, or funding veteran apprenticeships through DOD SkillBridge, or vocational school modules focused on foundry workstreams.
De-risk CAPEX: loan guarantees, cost-sharing, and accelerated depreciation for new facilities and modernization projects could attract more capital investors to this space.
Consistent Demand Signal: Domestic-foundry products currently have long lead times, and establishing a consistent demand signal incentivizes production scaling. Recent defense acquisition reforms reiterated the importance of a consistent demand signal. The DOE should also echo this priority. Establishing government commitment to this industry through a consistent demand signal will demonstrate the long-term viability of the industry to business leaders and investors and incentivize the R&D, capital investments, and workforce modernization programs required to reinvigorate the domestic foundry industry.
These policy levers will be crucial to revitalizing American foundries and the federal government has a vital interest in the success of this sector. Tracking this crucial supply chain should be a named line item in the White House’s Quadrennial Supply Chain Review to monitor progress and provide a policy framework for continued fine-tuning to support American Foundries. With American foundries reduced to 80% of their supply-chain capacity since 1980, this needs to be a significant policy focus akin to the current focus on rare earth minerals.
Conclusion
Revitalizing America’s casting and forging infrastructure is a strategic imperative essential for scaling defense and energy production. This reflects a bipartisan consensus that public-private collaboration is necessary to restore American manufacturing competitiveness and maintain the strategic and economic prowess the United States has enjoyed in the post-war era. By modernizing the advanced manufacturing workforce, de-risking capital investments, and sending a consistent, interagency demand signal, the policymakers can make great strides in reinvigorating this essential industry.
About the Author
Hank is an Air Force Special Warfare Officer completing a Research SkillBridge Fellowship with Lux Capital. In his spare time, he writes the Base Conditions Newsletter, covering the intersection of business, policy, and tech.
Disclosure:
The analysis, opinions, and recommendations contained in this memorandum are solely those of the author in a personal capacity. They do not reflect the official policy, position, or endorsement of the Department of the Air Force, the Department of Defense, or any other U.S. government entity.
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